Notes to the Consolidated Financial Statements (continued)
Derivatives
used for
financing
activities
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O O Qs
Introduction Report of the Executive Board Report of the Supervisory Board
Changes in borrowings
In millions of
Unsecured
bond
issues
Lease
iiabiiities
Bank
ioans
Other
interest-
bearing
iiabiiities
Deposits
from
third
parties
Assets and
iiabiiities
used for
financing
activities
Baiance as at
1 January 2019
13,150
326
177
678
(2)
14,329
Policy changes
1,252
1,252
Consolidation changes
4
15
8
27
Effect of movements
in exchange rates
97
29
(1)
1
38
164
Addition of leases
268
268
Proceeds
516
335
1,339
98
2,288
(Re)payments
(984)
(259)
(189)
(832)
(105)
(8)
(2,377)
Transfer to liabilities
held for sale
(4)
(4)
Interest paid over lease liability
(55)
(55)
Other
9
23
(2)
3
21
54
Baiance as at
31 December 2019
12,788
1,258
484
695
693
28
15,946
Baiance as at
1 January 2018
11,948
360
1,156
649
(57)
14,056
Consolidation changes
1
2
3
Effect of movements
in exchange rates
172
(18)
39
1
(114)
80
Proceeds
1,242
216
25
39
172
1,694
Repayments
(225)
(247)
(1,046)
(11)
(4)
(1,533)
Transfer to liabilities
held for sale
Other
13
14
1
1
29
Baiance as at
31 December 2018
13,150
326
177
678
(2)
14,329
Financial Statements
Sustainability Review
Heineken N.V. Annual Report 2019
Other Information
Cash flows from financing activities are mainly generated by bonds, commercial paper, bank loans and
other interest bearing liabilities presented above. Additionally, HEINEKEN also uses derivatives related
to its financing, which can be recognised as assets or liabilities. The above table details the reconciliation
of the liabilities and assets arising from financing activities to the cash flow from financing activities.
Bank overdrafts form an integral part of HEINEKEN's cash management and are included as a component
of cash and cash equivalents for the purpose of the statement of cash flows. For more information on
derivatives refer to note 11.6.
The interest rate on the net debt position as at 31 December 2019 was 3.0% (2018: 3.2%). This interest rate
includes the first time impact of IFRS 16. The average maturity of the bonds as at 31 December 2019 was
seven years (2018: eight years).
Financing headroom
The committed financing headroom at Group level was approximately €3.0 billion as at 31 December 2019
and consisted of the undrawn revolving credit facility and centrally available cash minus commercial paper
and other short-term borrowings. The financing headroom was lower than last year (2018: €5.2 billion) as
HEINEKEN maintained higher cash balances in 2018 in anticipation of the settlement of the transactions
related to CR Beer in China.
Accounting estimates
Significant judgement is required to determine the lease term and the incremental borrowing rate.
The assessment of whether HEINEKEN is reasonably certain to exercise such options impacts the lease
term, which as a result could affect the amount of lease liabilities recognised. The assumptions used in
the determination of the incremental borrowing rate could impact the rate used in discounting future
payments, which as a result could have an impact on the amount of lease liabilities recognised.
Accounting policies
Borrowings
Borrowings are initially measured at fair value less transaction costs. Subsequently the borrowings are
measured at amortised cost using the effective interest rate method. Borrowings included in a fair value
hedge are stated at fair value in respect of the risk being hedged.
Borrowings for which HEINEKEN has an unconditional right to defer settlement of the liability for at least
12 months after the balance sheet date are classified as non-current liabilities. For the accounting policy
on derivatives and cash and cash equivalents refer to notes 11.6 and 11.2 respectively.
Lease iiabiiities
Lease liabilities are measured at the present value of the lease payments to be paid during the lease term,
discounted using the incremental borrowing rate ('IBR'). Lease liabilities are subsequently increased by
the interest cost on the lease liabilities and decreased by lease payments made. The lease liabilities will
be remeasured when there is a change in the amount to be paid (e.g. due to indexation) or when there
is a change in the assessment of the lease terms.
